Credit cards and debit cards are often used as payment cards by consumers during transactions with merchants. Merchants read such payment cards using point of sale (POS) terminals during the transaction. Payment cards store payment information on a storage medium located on a surface of the card or within the card, such as a magnetic stripe or a integrated circuit (IC) chip compliant with Europay/Mastercard/Visa (EMV) standards. POS terminals read the payment information from the storage medium of a payment card, typically following insertion of the payment card into a slot of the POS terminal that includes an IC chip reader, or following swiping of the payment card through a slot of the POS terminal that includes a magnetic stripe reader. The payment information stored on a payment card and read by a POS device is typically sent by the POS device to a financial institution, which is able to identify a particular payment account using the payment information, such as a customer's bank account if the payment card is a debit card, or a bank account associated with a credit card institution that the customer is engaged with if the payment card is a credit card. To complete the transaction, funds are drawn from the account and transferred to an account associated with the merchant.
Payments cards such as credit cards and debit cards are types of transaction cards, which may also include cards used for transactions other than payments, such as public transit cards that authorize transit and optionally track transit, identification or entry cards that authorize access to a computer system and/or entry/exit to/from a physical area, and the like. Other types of transaction objects or transaction instruments may exist other than cards, such as badges, key fobs, and the like.
More recently, cardless transaction solutions have become available, in which customers typically use a mobile device, such as a smartphone, as a transaction instrument in place of a transaction card. Cardless transaction solutions can be very convenient for customers, who no longer need to bring transaction cards with them. However, cardless transaction solutions can be difficult for new users to adopt and use, and compatibility is an issue as a large number of POS terminals still do not accept payment instruments that are not payment cards.
Therefore, it would be useful to integrate benefits enabled by cardless transaction infrastructure enables within the framework of the payment card infrastructure in a manner that is easy and intuitive for customers to adopt and to use.